Saturday, October 1, 2016

With the rise of the one true physical gold market coming out of Shanghai, China in the past year, the London Bullion gold market has been seen to be both antiquated, and no longer of significant relevance as it primarily trades in paper contracts and rarely delivers physical gold. And with their paper based trading and gold derivatives making the institution little more than a mechanism to protect fiat currencies by beating down the fair market trading of gold, the both the LBMA and other European gold markets are now looking to modernize through the potential of blockchain technologies.

The London Bullion Market Association has started
negotiations with two financial technology firms to create a trading platform
for precious metals, according to two people with direct knowledge of the
matter.

The partnership between Autilla Ltd. and Boat Services Ltd.
was selected for further talks, according to the people, who asked not to be
identified because the discussions are private.

“It would be premature to comment at this stage as no legal
agreements have been signed with any provider,” Ruth Crowell, chief executive
officer of the LBMA, said in an e-mail to Bloomberg News.

The LBMA, which represents London’s gold market, is seeking to
modernize the world’s largest gold-trading hub, an over-the-counter system that
clears more than $5 trillion a year. Regulators are pushing for more
transparency and tighter controls. In other cities, such as New York,
transactions take place on an exchange.

The LBMA’s platform would mean deals between two parties can
be posted and stored in a database, and eventually lead to the publication of a
forward price curve.
Companies including the London Metal
Exchange, Intercontinental Exchange Inc. and CME Group Inc. submitted proposals
for the platform, people familiar with the matter said in February.- Bloomberg

And over in the rest of Europe...

Euroclear, the world’s largest Belgium-based asset and
securities settlement cooperative founded by J.P Morgan & Co., attended the
SIBOS Annual Conference in Geneva, Switzerland with Paxos to announce their
joint project and explain the importance of a secure and efficient
infrastructure in unsystematic gold markets.

The Paxos-Euroclear gold market-focused Blockchain
settlement solution will be the first of its kind and most likely the only
Blockchain settlement platform to be integrated by a major market like the
London Bullion Market.

Paxos CEO Charles Cascarilla believes that a
robust and secure Blockchain-based infrastructure will enable the London
Bullion Market as well as other leading gold exchanges to autonomously process
trades and increase the efficiency of the post-trade process. - Cointelegraph